Ethereum: the Path to Higher Prices Is Tested to the Limit, but $5500+ Can Still Be Reached.

Last week, see here; I concluded, “Thus, if Black Friday’s low of $3925 holds the tentative but preferred (green) minor wave-4 low, then Ethereum can target $5500-6400.”

That low gave way on December 4, as ETH dropped to $3575, opening a potential can of worms. Albeit a very bullish wave-1, 2, i, ii setup, targeting the long-anticipated $9k level, can still be entertained, this drop has me not sold on it. As well as when considering Bitcoin (BTC) is acting up: see here. Today I would like to show how ETH can still target $5500-5900 through an ending diagonal in Elliott Wave Principle terms. See figure 1 below.

Figure 1. ETH weekly chart with EWP count and technical indicators.

Ending Diagonals are terminal overlapping price patterns.

Last week I shared that I tell my premium crypto trading members,

“The beauty of the EWP is that we know with certainty after wave three come waves four and five. Thus as long as the wave four pullback does not infringe in the wave one high, we must anticipate another wave five higher.”

In this case, wave one high was the $3670 level made on October 8 (green, minor, wave-1, in the blue circle). Last week I then found, “Thus, if Black Friday’s low of $3925 holds the tentative but preferred (green) minor wave-4 low, then Ethereum can target $5500-6400.” Well, as we know by now, that level did not hold, and $3670 was breached. Thus this weekend’s drop cannot be a minor 4^th wave. Instead, I have updated the price chart showing an EWP count (red) where intermediate wave-iii topped.

And as said before, “also here we know that after three come four and five.” Thus, the current decline under this EWP option is a wave-iv, and wave-v to $5500-5900 is yet to come. In this case, the advance off the summer lows is considered an ending diagonal (ED). The price pattern converges like a wedge in ending diagonals, and the 1^st and 4^th waves can therefore overlap. See the black dotted lines and wave labels in Figure-1.

Besides, despite this weekend’s scary drop, the price of Ethereum is still above its rising 10-w simple moving average (SMA), as well as the 20-w, 50w, and 200-w. Thus the trend is 100% bullish on the weekly chart. Last but not least, ETH is also well above the rising (green) Ichimoku cloud, which also signals a 100% bull trend. Lastly, also in an ED the 3rd wave cannot be the shortest and the red solid arrow shows the maximum length for the anticipated 5th wave: right into the ideal target zone. Hence, I feel comfortable adapting my initial, more bullish EWP count to this one, potentially slightly lower targets.

My forecast will require adaptation if ETH decides to move back below $3575 on a weekly closing basis, which effectively means a weekly close below the 20-w SMA.

Bottom line: The Ethereum Bulls failed to hold the critical $3925 low, which was essential because “as long as that low holds, ETH can stage another impulse (5-waves rally) to ideally the $5500-6400 target zone before the subsequent multi-week correction unfolds.”

As such, the Bullis’ most likely hope now rests on an ending diagonal pattern targeting $5500-5900. But if $3575 is breached again, then a more prolonged Bear market has to be considered. Meanwhile, the weekly chart shows us ETH is still in a 100% Bullish uptrend, and as such, a bullish perspective -albeit slightly less so compared to last week- is still preferred.